St. Joseph approves $977,000 bond sale to fund 2024 street work after debt review

Tammy Amdahl of Northland Securities told the St. Joseph City Council on Aug. 19 that the citys debt is structured for rapid amortization and that the tax levy remains the primary revenue source for debt-service payments.

Amdahl, the citys bond advisor, said the recently sold series 2024A bonds were priced in a negotiated sale and purchased by TD; she reported the final par amount was $977,000 and the true interest cost, without seeking a separate rating on the issue, was 4.55%. "The final par amount is $977,000," she said.

The bonds are intended to finance the city's 2024 street improvements and to pay costs of issuance. Amdahl explained the series was not separately rated because the issue size made obtaining a rating uneconomical; the council retains an AA-minus issuer rating from S&P on its other outstanding issues.

Councilors asked whether the lack of a separate rating would raise borrowing costs. Amdahl said underwriters and buyers relied on the city's existing credit profile and that the small, nonrated sale was still competitive in the market.

Councilors then considered a resolution authorizing the issuance and sale of general obligation bonds (Resolution 2024-053). A councilor moved and seconded the resolution, and by voice vote the council adopted it, approving the negotiated sale and issuance.

What happens next: The resolution authorizes the city to proceed with issuance and sets the structure described at the meeting. City staff and the citys financial advisors will finalize closing steps and post-sale documentation.